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What extraordinary
abilities does Jack Dorsey possess that have enabled him to
tackle and disrupt the payment processing industry?

Certainly nothing in the Twitter co-founder’s career history hinted that
after conquering the social media world, he would build a
successful disruptive payments company—much less one that
is valued at more than $1 billion by investors just three years
in.

Square, a free
dongle that attaches to any smartphone or tablet, allows users to
accept credit card payments for a nominal 2.75 percent fee,
without lengthy applications to fill out, background checks or
setup fees.

Likewise, the hugely popular on-demand car service Uber wasn’t born
out of a transportation company. iStock Photo
wasn’t spun out of Getty Images, Airbnb wasn’t
incubated by Starwood Properties or Hilton—and my
company 99designs wasn’t a fancy design agency creation.

Regardless of what industry you examine, you’ll find it’s
typically not the experienced players—the people with existing
high-powered relationships within their target industries and
multi-million dollar R&D budgets — who end up creating the
“next great thing.”

Why is it that established companies fail to innovate,
despite lofty mission statements, massive R&D teams and
budgets, and deep industry connections?

It comes down to what I think of as the “we’ve always done it
this way” syndrome. A payments company like First Data likely
couldn’t begin to imagine doing away with setup fees, monthly
statement fees, terminal rental charges and an arduous and
painful application process that can take weeks. After all, they
– along with every other payment provider – have created
successful, profitable mega-companies by following a set formula.
Why on earth deviate?

More often than not, it takes an outsider with little to lose to
see things differently, tackle and eliminate the pain points in
an existing industry, simplify processes and cut costs. After
all, it wasn’t eHarmony or Match.com that decided to launch a
free, ad-supported dating site, figuring they just might pull in
significant revenue. Instead, Markus Frind created POF (formerly known
as PlentyOfFish) as a recent college graduate, and manned
the dating site for four years on his own before making a hire.

It’s now a multi-million dollar business with 30 million members
who send an average of 15 million messages to one another a day
and rack up a collective 10 billion page views monthly.

Of course, there are plenty of outsiders who have launched
“disruptive” companies that, in reality, did so little disrupting
that they quickly fizzled out. We only hear about those that
shake things up so severely that the affected industry will never
be the same again – the equivalent of, say, a magnitude-7
earthquake hitting a major city. So what’s the key to success for
outsiders who manage to go big and win big?

When my company SitePoint became the first major Web design book
publisher in 2002 to sell millions of dollars worth of books a
year direct-to-consumer (rather than relying on distributors and
retailers), the company was executing a business model that was a
180-degree spin from traditional publishing houses like O’Reilly,
Wiley and Pearson, which relied on retail stores for the majority
of their sales and revenue.

According to the Harvard Business Review, disruptive companies earn 20x more money than
their stay-the-course peers. Those peers moan and groan –
and may even hire high-paid Washington lobbyists to try to keep
their new competitors at bay. Some continue to fight
relentlessly, while others finally just whip out their wallets.
Witness Getty Images’ acquisition of iStock Photo in 2006 after
seeing how successful a crowdsourced professional photography
company that sells images from millions of independent
photographers via a self-service platform could be.

In a similar vein, Match.com bought POF free-dating competitor
OkCupid in
2011 (much to the grousing of many OkCupidites.) But many
disruptors aren’t selling out. And who knows—we may soon find
that they’re the ones buying.

Where will you find the disruptors of tomorrow?
Everywhere—literally. Step outside, cast a glance skyward and you
just might catch sight of a plane operated by newcomer SurfAir.com, an
all-you-can-fly airline serving popular California cities (for
starters) including Palo Alto and Los Angeles. Founded by Wade
Eyerly, 33, who previously worked as a National Security Agency
consultant, Department of Defense intelligence officer and
political campaign worker, the airline provides members with
unlimited short-haul flights on a private plane without the
hassles associated with traditional airlines such as security,
check-in counters, crying babies or toddlers who kick your seat.

Eyerly is undoubtedly shooting high. Yet SurfAir is a disruptive
idea that just may—to the chagrin of the major airlines—take off.
Will yours? There’s only one way to find out.

Matt Mickiewicz started his first company while still in high
school, and has leveraged his early success into three profitable
businesses which have have published 50+ web design books in 20
languages, paid designers over $30 million for their graphic
design work through 99designs, and helped entrepreneurs sell over $60
million in websites and domain names on Flippa.

The Young Entrepreneur Council
(YEC) is an invite-only nonprofit organization
comprised of the world’s most promising young entrepreneurs. In
partnership with Citi, the YEC recently launched #StartupLab, a free virtual
mentorship program that helps millions of entrepreneurs start and
grow businesses via live video chats, an expert content library
and email lessons.